There is a point of view that the progress of our society, both social and scientific and technical, is largely determined by the prevailing type of market relations that have developed in society.
The type of market relations, which is called the buyer's market, is considered the most favorable for development. It is this balance of forces of players in the market that stimulates the majority of enterprises and organizations for development. And the strongest and most successful player wins.
Let's consider what a buyer's market is.
What is a market
Market is a set of turnover of goods and services that currently exist on the basis of consumer demand and dealer offer. The modern market is not territorially limited and exists more as a global concept.
Market functions
The market in the modern economy performs the following functions:
- Provides a close relationship between the production of certain goods and services and their consumption.
- Stimulates production towards qualitative and quantitative growth.
- Reduces production costs by optimizing technology.
- Stimulates scientific progress.
The market encourages the manufacturer to produce exactly the products that meet the needs of consumers. The manufacturer and his success in the market directly depends on how accurately his product meets the needs of the market. A strong producer in a modern market economy is one that uses its economic resources most efficiently to meet consumer needs.
Therefore, in a competitive market, the strongest manufacturer wins, whose product is of high quality and meets the needs of society.
The market constantly stimulates the manufacturer to upgrade products, change them.
Key characteristics of the market
The main characteristics of the market are:
- Variability. Both demand and supply are constantly changing under the influence of various factors: demographic, economic and even political, psychological and other external, related to living conditions and internal, related to the psychology of the consumer and dealer.
- Self-regulation. The market automatically reacts to changes in the quantity and quality of goods. For example, when there is a shortage of goods, the price of it rises, and when there is an excess, it decreases. Also, when new products appear, the price of old products decreases, as demand decreases.
- Economic freedom. The consumer and the manufacturer independently determineall ways of interacting with each other.
- Free competition. Competition is a necessary condition for market growth, improving the quality of goods and services and optimizing pricing policy.
- Market capacity is a characteristic that is determined by the ability of the market to absorb a certain type of product in a fixed unit of time.
Depending on these characteristics and features of the interaction of market entities, the entire market can be divided into a seller's market, an intermediary market and a buyer's market.
Seller's market, middleman's market and buyer's market
Depending on who takes the leading role in the market, all markets can be divided into:
- Seller's market - a market in which the manufacturer and supplier of goods play a leading role, largely determining the current situation, as well as supply and demand for goods, and having a great weight in pricing. This is a market in which there is a shortage of certain goods and services.
- The intermediary market is a market in which distributors, marketing channel intermediaries, play a leading role, and demand, supply and price are largely determined by them, and what matters is not the presence and absence of goods, but well-built positioning, marketing and logistics.
- The buyer's market is a market whose rules are formed by the end consumer. It turns out that sellers are forced to take an active position, the quantity of goods grows, the price decreases, the quality increases. This, to some extent, allows buyers to installmarket rules. It turns out that a buyer's market is a type of market that is completely controlled by consumer demand.
Features of the buyer's market
Important characteristics of the buyer's market are:
- no shortage of goods or services;
- most products are made to high quality standards;
- manufacturers are trying in every possible way to reduce the price;
- high competition between manufacturers and dealers;
- sellers are forced to make efforts to sell their goods;
- an important criterion for success is a constant customer focus, the study of customers, their needs, needs and behavior in the market. The buyer's market determines the interaction with customers;
- products on the market are very diverse;
- the supply of goods exceeds the demand for them.
The buyer's market is a market that is distinguished by a large selection of goods presented, the ability to find exactly what suits the specific needs of each. Studying the market and consumers largely determines the success of a manufacturer or distributor.
Segmentation of the buyer market
To succeed and get high sales in the buyer's market, the study of demand and buying behavior is essential. The easiest way to study the demand is by dividing all potential buyers into groups that are similar in certain characteristics.
Therefore, one of the key points of market researchis its segmentation.
Market segmentation is the division of the entire mass of buyers into separate groups, which, according to expectations, will respond in a similar way to certain marketing actions. It turns out that the segment of the buyers' market is a group of people who interact with the product in approximately the same way.
Buyer Market Trends
The market trend is the possibility of its change in one direction or another, depending on the direction of economic processes within it.
The trend may be towards a change in market capacity, a change in volume, profits of traders and many other factors.
If the seller's market and its trends can be tracked by production volumes and the establishment of a quality relationship between the seller and the buyer, then the buyer's market trends depend largely on social factors and on the demand for a particular product.
In a situation where supply exceeds demand, the terms of the game are dictated by the consumer. And the winner, as a rule, is the one who is able to either predict consumer behavior or generate demand on their own.
Demand is generated through marketing and advertising campaigns, as well as through the mediation of the media.
The buyer's market is the perfect stimulus for the development of society
The seller's market involves the struggle for the consumer's wallet. Despite the conditions of shortage of goods, effective demand still remains limited. And in this case, aggressiveadvertising and tough ways to market the product.
But such a situation in the natural environment does not last long. As a rule, new players enter the market. And in this case, the market evolves to a buyer's market - a market focused on the needs of the end consumer of the product.
The situation on the buyer's market requires the construction of certain marketing strategies for interacting with them, as well as improving the quality of the product and its functionality.
Such a market is much more conducive to progress, because there is natural competition for customers, which means that it is necessary to monitor the quality of the product, as well as improve it. Come up with related products, thoughtful advertising campaigns.
The production is based on the results of marketing research. And manufacturers pre-create only the goods that the buyer is expected to need. The main buyers' markets were once sellers' markets.
It's just that the market in its natural environment almost always gradually becomes customer-oriented - this is a natural process.
Evolution of the market on the example of real estate in Moscow and the regions
In the mid-2000s, the real estate market was in a state of reduced supply and increased demand, as well as in a state of full availability and ease of obtaining a loan product. Real demand has steadily increased amid limited supply, creating a seller's market in real estate.
This contributed to the uncontrolled increase in prices forhousing. Luxury housing in cities has increased in price by more than 65%.
The market growth trend has been unhe althy. But for the sellers, the situation was comfortable and convenient - anything could be sold.
It was then that the acquisition of apartments at the construction stage became widespread.
After 2008, demand began to fluctuate amid financial uncertainty. Buyers showed less willingness to purchase a loan product.
Demand began to decrease first in Moscow and then in the regions.
At the same time, home sellers did not rebuild, prices remained at the same level, the real estate market was in a stagnant state for a long time. There was no marketing. The buyer's market has not yet formed.
From 2014 onwards, the real estate market is approaching the buyer's market. Demand for real estate is declining, and even the excitement associated with rising dollar prices did not lead to its jump, leaving it at the same level. The solvent growth has decreased, and, accordingly, real estate prices are decreasing.
Buying construction options or unfinished housing has become much less popular.
The construction boom of recent years has led to the formation of a consistently high supply of primary housing in Moscow. Demand is growing at a much slower pace, which could help ensure that the Moscow housing market remains a buyer's market for a long time.
